Did the Great Recession Happen in Retail?

If you noticed, I've focused some my tweets (rants) on Commercial Real Estate ETF ($IYR).  Whereas I think CRE should not have participated in this rally (another blog for another day), I believe that the SPDR S&P Retail ETF ($XRT) is at a level that is beyond silly.  This ETF started trading in June 2006 (pre-financial-Armageddon) and recently hit an all-time high!!!  XRT is basically going up due to good same-store sales, good consumer confidence and decent retail numbers.  But let's put the respectable 13 P/E and nice headlines to the side.  Can you say:  V-Shaped Recovery???

Brace yourselves:  the consumer is not dead (?).  In fact, the consumer seemed to navigate through unemployment, salary cuts, foreclosures, the financial crisis and increased commodity prices.  Ok, fine, the consumer probably benefited from some retailer price cuts.  Black Friday will be veeeery interesting.

At first, I thought this ETF was 100% held in Amazon and Netflix.  That could be the only explanation for the 300% return since November 2008.  But I am usually wrong:  XRT has Gymboree, JC Penney, Carmax, Officemax, Group 1 Automative, Ann Taylor, Tiffany, Abercrombie+Fitch, Whole Foods and Best Buy as its top 10 holdings (18.5% as of 11/12/2010).  I'm sure these larger companies have managed their inventories/balance sheets and benefited from smaller players going out of business.

Do I think XRT should re-test 16?  No.  Do I think Retail was completely immune to the financial crisis?  I think not. I will be buying XRT puts and once there is volume, RETS (3x Bear Retail).

One caveat, this is more of a disbelief of the current price level relative to the broader market than any TA or macro analysis.  POMO is fine and well but the consumer is not alive and well.  Maybe I'm missing something.